to rise. imf will be lowering expectations from 2012 into 2013, expect that number to be somewhat disappointing. >> that does it for the closing bell. thanks for watching. >> "fast money" starts right now. america's favorite stock faulters. tough couple days for apple. like death. wow. >> i think stocks will give a higher return over bonds the next decade are probably 85 to 90%. >> with the anniversary of the market's pre-lehman high tomorrow, do traders plan on discould have earring new record this year? is a brave new world on "fast money" tonight.vering a new rec year? is a brave new world on "fast money" tonight.

at the nasdaq market sites at new york city's times square, i'm melissa lee. happy columbus day. >> was that a -- >> christopher columbus -- >> surprised. we have done that every year, the last five years. >> doesn't matter? >> doesn't matter. tomorrow marks a milestone for the market, five years since the s & p 500 hit its record high. down about 6 1/2% since then so the question here is can stocks ever get there and what will it take? could it be earnings season? what do you think, pete? >> probably have to be earnings season a different catalyst every single week, we get into this week, obviously everybody last week focusing on the debates, some of the economic numbers. now alcoa out tomorrow but i think later in the week, we start to hear from some of these banks. look at the volatility index, yes pushing up on that 50-day moving average, pulling back off it again today and remain closer and closer towards that 15 level. you look at the financials right now, today, again, they trade

pretty nice, actually, market off the financials are basically flat once again so i'm looking at these financials, looking for any kind of catalyst to push us to the upside and keep an eye on some of the regional banks like a fifth third, a lot of option activity today. i continue to look at these as they are tied to the mortgage world as well. >> going to be earnings, the bears might have a field day with the statistic what is to expect for earnings season because wall street is, in fact, setting up for the worst earning season since 2009. preannouncements the most negative we have seen in about 11 years. >> think what we had coming into it we had fedex, we had caterpillar, intel a couple of weeks ago, all the big boys across a couple important sectors told us. i agree with pete. you pick your pockets. look at financials that is one of the places that analysts third quarter up 21% eps growth, fourth quarter, 32, 33. again, as we are talking about five-year highs on the s & p, financials still roughly 60% below where we were. you look at global growth going into this earnings season,

everybody knows where it's at. world bank downgraded global growth yet again today, china back from their golden week holiday with a thud. people were expecting a lot of either policy-backed -- backing a market that's been lethargic. europe, industrial production out of germany today, terrible. we know what we are getting. we do need earnings here, no ways we can take new highs out until we see the companies are making money. >> you look at where we are expecting to see the earnings, consumer discretionary stands out, 7.8 growth expected in the third quarter. the question here do the stocks already reflect this optimism? >> no i mean, i think i'm still holding something like a macy's. i think see a very good quarter from macy's. so happy to be there some of them are pricier but i still think there is room there. i think that we have also seen inventory management is pretty good and i think that that will translate into decent earnings. >> a day the s & p should have been, could have been down 15, 18 handles.

again, i'm not camp that despite what we are going to hear from earnings, the s and st. going to push toward this -- >> why dump 15 handles? >> just the news -- it was just a lot of negative news out there. coming off a weekend where you didn't get a lot of great things. to me, the fundamentals have been tepid at best. the economic news we are getting domestically and overseas happen been again, marginal at best. the market keeps looking past it >> let's zero in on one of the earnings out tomorrow after the bell and that is alcoa. scott nations on the options desk, curious on the moves in term to s of alcoa. >> unfortunate alcoa is one of the first ones to announce every earning season, a little like new hampshire being the first presidential primary, not really that indicative. alcoa tends to be pretty -- bounce around pretty good on earnings, expecting almost 5%.

the thing about alcoa, it is going to tell all of the other big industrials what they might expect this earnings season. i am a little surprised. i was the only one last week on the show who was bearish, if you listen to the preearnings announcements, it is just apocalyptic. i also think, pete mentioned the vix, i think 1511, where it closed today, actually means that people are way, way too complacent. they think the series of higher highs and higher lows in the s and ps will continue forever. i think some people are going to be really disappointed. >> they are complacent now, pete, but in terms of future months, approach the time where the fiscal cliff will be negotiated, do traders expect volatility to increase? >> slightly. if you go on the curve and look at that volatility index, trading higher than it is here 1511, as scott just mention baud part where people are looking that the alcoa, as a matter of fact, would say they are expecting a demand coming from the bricks. i know timmy can speak to that i don't even look at alcoa other

than anything as a figure, we all look to it because of the fact it is a dow component. >> you don't care that it is an automotive and industrials -- >> some specific nonrecurring item. >> specific. >> that is not the bellwether like a cisco might be. >> reducing that cost input. one of the things they are trying to work on. how do we reduce some of the costs that go into our production? >> they have been more efficient but will have a couple of one-offs, karen, if you read through, lose about six cents, won't count one of them, finish in plus one. but class klein fed is a guy often i think is a little too much of a cheerleader for the global kind of industrial world. i just saw him in moscow last week at a big conference. he was talking up the growth that's coming out. global ar row, global auto, despite what is going on in europe, they are seeing demand for rolled products in alum enough. you have major headwinds for this company. again, talking about a company that is going to be focusing on how efficiently they run their

business, not necessarily the global environment. i don't think things are ter anybody aluminum. i agree with pete. i don't think this is a tell across the industrial space. i think reasons to be excited about what is going on in aluminum but alcoa is not the name we are going to be doing cartwheels for. >> your girl. >> my girl. times i cartwheeled for her. >> move on to shares of am, they fell today, once again park the stock is down 9% since the sale of the iphone 5 s it fundamentals or maybe something else investors should be watching now joining us with the technical break down is chris verrone, head of technical analyst at strat teen jesse research partners. good to see you. >> good to be here. >> is it, in fact, a technical break down we are seeing crossing below the 50-day moving average? >> a pause or a risk. this is a stock leadership basically all year. we look at relative strength charts or what is done the last couple of weeks, it is certainly in that pause camp or that rest camp. breaking through that 640 level

probably not the backdrop. we could probably see 575, 580. i think those are levels you have to own this thing. over the longer term chart here this is still very much a bull market in apple. but i think the big story playing out here though is a very subtle leadership shift away from a name like apple and maybe into a name like a google where we have seen apple lose some relative leadership the last number of weeks. while i think the bull market, longer terms still in play here, i don't think it provided the relative value that it once did. >> what do you see in google that makes you believe the momentum will continue, especially after it recently hit all-time highs? >> think to have this way, google spent the last seven years between 350 and 710, 750 today. does it just stop there after basing for seven years? i would argue probably not. those are the type of breakouts among the s & p 100 companies that just started to play out. would i rather on a longer term basis own a name a relative strength leader for years or just starting to break out from a big long base.

>> chris, any phones that apple is an early warning sign for the s & p? if so what are the levels interesting here? >> certainly gentle and commands five, six percent of daily price action. so, in terms of what it means for the broader market, i think it speaks like the apple chart speaks, probably due for a rest, probably due for a pause. i think the price action the last couple of weeks has reflected that in the post qe 3 environment. in terms of levels, 1420 is probably that initial support band. i would focus on 1360, 1370 about a 6% correction from top to bottom what the moves looked like the past year or so. so i think that's in play. >> you be talk about money out of a into google, how much money would you say would -- is a zero sum game in that? clearly not all shareholders are worthy of it but how much? >> i think there's a lot of managers who simply own too much apple here, heading toward the end of the year, board meetings, you have mandates, owning 8% of

your hold bassing in am is too much here. a name like google starts to make sense, you begin to see that flow away from apple into something else. >> the question for the broader market, a technical strategist, looking the how crowded trades are in general, how invested people r hedge funds year-over-year probably up, data out today, says 5 or 6% up in terms of their leverage, they are more comfortable taking risks, whether that's right or wrong. how do you feel about this next leg higher in the markets? we will see if earnings can validate a good call but how crowded are we here and do you think a lot of money has come in off the sidelines or some of this is really -- these are flimsy levels aside from an a that will are ready to fall? >> tim in this type of environment, want to play winners, relative strength leaders, what is ironic about this market, up 13, 14% year-to-date. ask i asked everyone, only knowing that information what the top groups were, it would be upside down. hasn't been transports, small caps, it has been health care,

calling health care the 15-year breakout no one is talking about. look at eli littler, pfizer, merck, compelling charts, a group taking relative strength. those are the type of stocks i want to be buying on pull backs. >> last question, i know that the bottom line you gave investors, probably rather invested in stock that is showing the most momentum at this point and that would be google. all the apple investors out there, there are plenty of them. what level does apple need to hold in order for you to believe it is just a slowdown in momentum as opposed to a break down? >> i would anticipate we told that 575 to 610 neighbor hud. so again that's 4 1/2, 5% from where we are today. i don't think that is a big deal. i think that is a pause within the context of a longer term uptrend. relative strength players, google is a better strength player. >> chris's job the health care call last time on the show. >> they have been. and pete, you have been in the health care trade a very long time now, where are you at? >> i remain and every one of the names, chris a lot of the same name, i'm in merck i continue to be in lilly, i switched over

from pfizer. but i actually like the whole field. i don't know that there's necessarily one. i like the multiple of these big pharmassome there any specific names you think stand out right now? >> not a $50 stock, a $55 stock. pfizer not a 2425 stock it is a $30 stock, maybe more. i think when you put this in context of the big basis these things have put in the last 10 or 12 years, these are going higher. >> take a break here. tech sector hanging near all-time highs, if you didn't get in on the rally, you are in luck tonight. stick around to find out what under-the-radar names could be your best bet to play catch up. later, from iran to venezuela, flash points erupgt around the world. we have the trade to help you navigate all the turmoil. stay tuned. lots more fast, straight ahead.

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a lot of techs have done well. google and amazon trading at highs. ibm doing well. apple was over $700 three weeks ago. as i pick through the stocks, particularly good run, a couple of theme also jump out at me, mobile and big data, the companies that managed to tap into one or both of those part of their growth story doing particularly well. here are a couple of the less obvious names i note near highs. tara data for storage, crown castle for wireless, accenture for consulting, need more of those services when you have cloud and mobile forcing companies to change the way they approach i.it..

north america and asia are the two big growth areas for accenture. what happens next? i can't help but notice on valuation, apple really isn't that high. some of the tech giants that are near highs, names like oracle and qualcomm also have pes below 20. if you believe apple's ipad or maybe ipad mini can cannibalize pc sales despite windows 8 coming out this month or google's growth trajectory with mobile ads and youtube can't continue, maybe those aren't such bad bets, guys. >> going to trade this, john. thanks for that. karen, you own apple and google, i want to ask you, because we had verrone on saying woe rather own google. at this point, have you been pairing your position in apple at all just from a portfolio management standpoint? >> no we had some quick spreads that we were long against some way out of the money calls. we unwound part of that trade today. sell willing some put spreads for exampletively getting longer, taking those out of the money calls. to use a clinton phrase, there's nothing wrong with a that will can't be fixed by what is right

with apple. i think that i don't know when that will be, but i think we will see some big quarters in the not too distant future around could it trade sfloer of course it could trade lower, i'm long. staying long boat. >> over to the semis quick. on the 28th, the guys announced what you didn't want to hear, the stock is at a major one year level, 12 times the sector. some of the other guys will follow. again this is an interesting place going into this quarter to be picking up semis that had their faces taken off. watch that one. >> accenture a name we don't give enough credit to or talk b a nice dividend, john mentioned, the stock has been on fire and have an analyst conference i think on thursday of this week in new york. you can probably see the stock continue to run up into that conference. >> big data, pete? >> i like the big data play, still like apple at these levels and i think the next catalyst will be this mini ipad, i think

bigger than people think. going into the emerging markets with a more affordable product, that can be huge i know steven jobs was against the seven-inch vein screen but i think management is right. people crave that wants that and gives them a better price point, builds on the ecosystem. like at what ibm is doing at a 12 p/e, 1.6% dividend, not all that great. but their moves in the cloud and data, the discipline how they go about their business, their acquisition strategy, i think it is magnificent. this is a company that probably doesn't get talked about enough either that continues to perform as we watch hugh, let dell and all the rest of them fall off the cliff. >> a market flash at this point, jackie deangeles with a look at marathon petroleum. >> purchasing pb's texas refinery for $598 million plus inventories estimated at $1.2 billion. the agreement also containing a earn out provision where pmc could pay another 700 empty next six years. expecting to see this be accretive to earnings the first year of operation, expect it to

be furnished with cash on hand. we are higher by 5.5%, marathon petrole petroleum, mpc >> the activity was pretty brisk today? >> absolutely was. not only did it hit a big new 52-week high today done the same thing on friday, people loved the news. option traders want to be long this, want to be long calls, bought over 25,000 calls today, about 12 times the average daily volume. interestingly, they are pretty short data. they think the pop is going to come quickly and going to subside a little bit. we sought november 55 and 57 half calls really lead the way when it came to volume. >> this really kicked off this past week. late in the week this past week, the november 60 calls bought for 60 crept he is. late thursday afternoon into friday, continued to be activity in the this name. the refiners continue to be the spot that everybody seems to want to be. we have seen activity in everything from psx. seen some in sun corps but val lair row, all these different names, i love seeing that

activity in the marathon last week, really tells us a lot about what people expect and already getting dividends from what they did this past week. >> move to our next trade here. after being pat battered and bruised will coal be the comeback trade? arch cole, consol energy feeling the love from republican presidential candidate, mitt romney. >> by the way. i like coal. i like coal. i like coal. i like coal. i like coal. i like coal. >> did he say that it that many smiles to. >> we loop it had, full disclosure. >> max headroom. >> magic of tv. >> did he say i like coam, obviously. the question here is are these stocks a buy? michael dude disat minings and metals joins us on the fast line. great to have you with us. >> thank you. i love that loop you just did. that was great. >> sure it's your ring tone. >> yeah. you're right. it's good. >> in terms of the coal trade a lot of analysts out there, like yourself, have been getting more bullish simply because -- not simply because but mainly because nat gas is now in the $3

range. how much is a factor? at what point do utilities actually switch back to coal? >> i think seeing lot of utilities switch back now, i guess we are 340 spot gas and the strip is nearing $4. those prices allow powder river basin coal and illinois coal to be in the money. i think you are seeing some more coal dispatch relative to gas and should be hellful for demand and operation going forward. there. are a lot of coal plans that are going to be mothballed. the battle group had a study out thinking 59,000 to 77,000 megawatts in coal plant capacity will, in fact, be retired. won't that at the end of the day have a negative impact on the sector? >> that's about 20% of capacity but probably only 10% of effective coal-fired electricity generation. much all of that's been well priced into the equities here. i think if you get a normal

winter, a better economy, gas to continue to move higher, as we move into 2013, china starts to pick up and get better demand for steel and met coal. i think a turn around in the stocks. i think that capacity closer numbers well factored into the names. it is karen. do you see any consolidation in this base? >> probably not before the november elections. but having said that, certainly these stocks have come way down from where we were when there was a round a year ago. when off weaker dollar and recould have any global economy, i think international economies might be interested in some of the companies here but nothing in the near term. have to see how the elections play out. >> hey, mike, it's tim. i care about supply rationalization by the reducers, i care about the cyclical side, you see coke and coal. anything here, we have got a bit of a bounce in iron ore.

>> about 30% is probably under water. you will see that rationalization f that happens the next year, rebound, steel production, economy better globally, you get a lift. probably in the fourth or fifth inning of the recovery. >> michael, thanks for your time. appreciate it. michael is buying across-the-board on the coal sector, console peabody, arch coal, alpha natural. . >> tech resources another name i like. go another derivative off of this talk about joy global, caterpillar, one other way, your favorite, a name you probably have more of, ge. they have gotten themselves a little bit deep near this whole mining, a lot more into the acquisition tape, smaller.

talking about as 5 billion revenues portion of their business. mike holland all over this story as well. i love this the direction ge continues to innovate themselves and become a far different company than five years ago. up next, some traders aren't buy nothing china's slow down fierce and putting their money where their mouths r that story. later, a trade of the day that is just what the doctor ordered. stick around. going too lift the curtain and reveal what it is later on in the show. mike rowe here at a ford dealer with a little q&a for fiona. tell me fiona, who's having a big tire event? your ford dealer. who has 11 major brands to choose from? your ford dealer. who's offering a rebate? your ford dealer. who has the low price tire guarantee... affording peace of mind to anyone who might be in the market for a new set of tires? your ford dealer. i'm beginning to sense a pattern. buy four select tires, get a $60 rebate. use the ford service credit credit card, get $60 more. that's up to $120. where did you get that sweater vest? your ford dealer.

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two flash points erupted down the world of late, tensionless risen as two asian nations argue over ownership of a string of uninhabited islands in the east china sea. japanese car companies like toyota and honda reported weaker sales in the month of september due to this conflict. and we should be specific, when we say weaker, they are significantly weaker, tim, toyota china sales down 40% in the month of september. mazda saw a 33% decline in sales, but we did see some of the nonjapanese foreign automakers do well. hyundai, bmw. >> gm. so, this is a knappty, you know,

battle hopefully, you know, stays on the trade war and no more but this is -- this is something that people are watching and the color i'm getting from guys coming back from japan is these islands mean zero to them in terms of resource value and it's very much of a political stand that's not going anywhere. we are out of time and i know we set the table there is's a lot going on in the globe now. certainly the place geopolitically you have the most at risk it is going to draw in other players. lunch this mean more of an impact, more of an impact on japan? actually see this, you think, trickle down to gdp numbers? >> right now, i think it's too early to say but no question that people are watching it and watching it especially the a time when people are concern about the strength of the yen again. this has been a doubled-edged sword for these guys. their currency choking them the past year. you have them outwardly taking back business. some of their key export markets are also in europe. so, japan is a place where the japanese stock market is obviously, as we talk about five-year nice our market, this

has been a market people have not been able to get out of their own way, i don't think off lot of good news coming down the pike. >> would you go to the other asian automatics there to -- who might pick up some share? >> i tell you what, we like hyundai a lot and like it because it is the third largest weight in the korean index, a local mark that's has to be held by the local pension funds and some of the insurance companies and they love this company. their industrial growth is strong. and i would stay there >> go back to headquarters, check in with jackie deangeles, breaking news. >> the imf just releasing its world economic outlook update. the headline is that global growth projections are being marked down, downside risks are more elevated so looking for 3.3% and 3.6% growth in 2012 and 2013, ticking down .2 and .3% representatively. now in the united states, growth of 2.2% for this year, 2.1% next year. a revision of .1% high they are year. the bright side that the housing market and private credit

ex-spans are occurringing. the downside worries, political gridlock and of course, the fiscal cliff. for the euro area, growth contraction of .4% in 2012 but an increase by .2% next year but there, of course, concerns that weakness may be spreading from the periphery to the whole of the euro area. meantime, china, 7.8% growth this year around 8.2% next year. those numbers coming down slightly but india, a big tick down, 1.3% this year to 4.9% and .6% next year to 6% growth. that was one of the sharpest drops that we saw. meantime, brazil also getting clipped, remanufacture sizing the point that there may be trouble in that bric paradise we keep talking about the main issue though, if the economy is hitting another bout of turbulence or whether the current slow down is something more long lasting. melissa? >> all right, jackie deangeles, thanks for that in terms of the china numbers getting ratcheted down, we have a preview of that from the world bank today which causes concerns about china growth. we are on the eve of yum earn

eggs tomorrow. so karen, as we are hearing all of these estimates ratcheted -- get ratcheted down, are you concerned at all about the yum story? >> i exited the yum story way too early. i just think it is sort of fully valued in there it is a great company. it's a great franchise but i feel like it's already priced in and at some point, timmy can answer this better, some point, i don't know when china's slowing growth becomes a positive in the expectation of more aggressive stimulus there. >> we own the stock. holding yum into the numbers after the last couple of quarters is a bit of a daring move because, again, this is a company that, as karen said you can 17 1/2 times earnings trading at a five-year average. now, china growth really driving it and they expect, dave novack said, through 15% over the next 2020. the key are cost input, margin what is took them down in the last quarter that is getting better, they are raising prices, passing it through to consumer, right now the growth is still alive and well. but people have shown? a crowded trade and they sell it hard when they believe that, you

know, the china experience is change. i think we priced in a lot of bad news already. >> daring to hold it. >> we dare to hold. dare to hold >> tim's daring. >> an option trade on fxi. scott nations, let's go out to you u. >> that's right. this is the hong kong etf, so not broad china. but broad china, close to 8% probably not as bad as it might have been. fxi, the charterville past six months pretty ugly but picked itself up and some option trade, one option trader in particular think it is going to continue to do that that and they are bullish. how did they express that today? sold a bunch, 10,000 of the february 30 put, collected 57 cents for doing that. that is a bullish trade and used some of that premium to get even more bullish, did that by buying the february 40 calls, paid 27 cents for that. net net, they collect 30 cents. they don't want to keep that 30 cents, not all they are looking for. what they are looking for is for

fxi to rally above that $40 level before the february expiration and the beautiful thing about a trade like this we call it a risk reversal is that they have all of that upside above $40 up to the february expiration. >> scott, thanks for that just so people know what they are holding when they hold the fxi, tim -- >> largest holding is china mobile around 11%, china construction bank, c nook, ceo, the big names of really -- names that you also trade in hong kong but this is the china puts top 25. >> forget earnings in the election, there is a trillion dollar bomb ticking that could pose the biggest threats to stocks for now and you the long haul. find out what it is and what it could mean for your bottom line. how is the big money tackling big headwinds? university of texas's management company -- >> i thought that was mine. >> bruce zimmerman manages one of the largest endowments in the country. he has some answers right after this. [ male announcer ] trading's like a high-speed train. and you don't want to miss it

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welcome back to "fast money," live at the nasdaq market site. nearly one-third of public pension plans do not expect to

hit their return target over the next five years. this according to a new study by pir rah mist global advisers. what challenges are they facial behind will it impact investors in derek young you can the vice president of pir rah mist is here. he is the president of fidelities global asset allocation group. glad to have you here with us tonight. >> thank you for having me. >> fascinating sur acres have of 193 of the largest u.s. corporate pension plans and at this point, is there a pressure to sort of chase for performance given the targets they have to meet? >> it is a great question, right? because when we look at it we see in u.s. particularly, the pensions have a required rate of return of 8% and they are concern about the low return environment that they have been living in, right? you live in a low return environment,. >> what is liability-driven strategy? when you ask them how they are going to make up for this all,

that was the number one response. >> so a liability-driven strategy is one where you're basically matching up, future payments you are going to have to make on the liability side with your investments that you're making on the asset side n essence, you want to pair the two up, you get paid out on your investments at the same point in time tough pay your liability, a very elegant way for plans to derisk a portfolio. in essence, creating an asset liability matching strategy and you we are seeing more and more corporate pension plans in particular go down this path. it's -- again, a very elegant solution for those guys. >> it's karen. that isn't what has been in place for much of the past. how do you address the gap which continues to get bigger around bigger? >> you know, it's interesting, think they would have locked this in the 1990s when they had overfunded status they did not, because many of the corporations it was one of the largest assets on their balance sheet. they didn't want to go in and take that risk off at a point in

time the markets were giving they very positive returns. fast forward. a really difficult environment, the past ten years. now all of a sudden, you see plans maintain their traditional allocation. now underfunded. the question comes back to, okay, if you ever are funded -- fully funded again what would you do in the future, having lived this in the past? and many are look tact and saying, you know what actually, our corporate balance sheets are strong enough, we can take that risk on right now of redee risking the plan full and paying out cash in order to use this liability-driven investing to in essence, create certainty about their statements they haven't had in the past. cfos can take one of the things off their list they worry about at night that keeps them up. >> derek, how do the fund managers presently feel about the volatility of the market? the loaned of the volatility as far as the s & p 500, how are they approaching investments based upon that? >> yeah, you know what, great point there, because basically what's happening is we see volatility as bag big concern. it shows up from our clients, shows up in the survey.

in essence what they have done is they have tried to rethink some of thes aet classes they are investing in. we see from the survey they are invest nothing more alternatives, both i will little quick and liquid alternatives. in an environment right now, in essence, concerned about volatility you realizing they are getting paid for the risk they are take and therefore, reached out on the risk spectrum again, trying to meet this bogey, if you will, that's 8% rate of return and concerned where do you reach to find those opportupportunitie opportuniti opportunities? >> derek pyramis as well as fill debtity. how can they overcome this lower term low interest environment have elizabeth smart bring in bruce zimmerman, one of the largest endowments in the united states investing more more than $27 billion.zimmerman endowments in the united states investing more more than $27 billion.bring in bruce zimmermaf

the largest endowments in the united states investing more more than $27 billion. >> we make one investment at a time, invest in funds and continuing to ladder into that port foal yoerks particularly the real asset portions of that illiquid portfolio. >> bruce, do you feel the policies of the fed are forcing them into the equity market?

do you feel that? >> our job is not to feel pressure on anything. we are global investors. about half of our portfolio is invested outside the united states. what we again look for, we invest with funds, is aligning with the most skilled partners we can around the globe who are very focused in their particular areas of expertise and doing one good deal at a time. >> bruce, quick question, then a longer one, but the quick one, do you think that larger managers empirically the numbers say they don't do as well. are you wary of that as you're investing? >> we do have a bias toward smaller managers. it's not to say that large managers can't do well or won't do well and we are invested with

some very large managers. but we do -- if you look at our book, we do have a much larger exposure to smaller managers. we think that they have an ability to find nichier things, an ability to be more flexible and more nimble. they are quite hungry. we find our economic interests align. >> thank you. i will leave it at that, that was the answer i wanted to hear. >> and bruce, last question here in terms of thinking about where the investment opportunity is right now. what is the change in your portfolio that's reflected where you think there's the most upside in the next two, three, four years. >> well, we are continuously reshaping our portfolio. i suppose there are two longer term trends that we have invested in and think we will continue to invest in. one in the developed world we

call a long workout. we think we are overindebted and there will be stress sellers and good assets that are over -- overlevered and we think that presents good buying opportunities. real estate's a great example of that. in the merging world, we call it a long march. we think -- when we say the word long, we think 10 years, 20 years. so, here again, what we are looking to do is find the best managers, the best partners. we think price is real important, just because there's going to be good economic growth doesn't necessarily mean we will get good returns on our capital. so much of that depends on buying at the right price. >> all right. bruce, thanks for your time. really appreciate you coming by, bruce zimmerman, ceoo and krichlt o of university of texas investment management company. up next, we continue to give you twice navigate the turmoil. we have a strategy for the latest developments out of south

africa, when we come right back. well, if it isn't mr. margin. mr. margin? don't be modest, bob. you found a better way to pack a bowling ball. that was ups. and who called ups? you did, bob. i just asked a question. it takes a long time to pack a bowling ball. the last guy pitched more ball packers. but you... you consulted ups. you found a better way. that's logistics. that's margin. find out what else ups knows. i'll do that. you're on a roll. that's funny. i wasn't being funny, bob.

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the retailers have big issues on price inputs. look at the minors because they

benefit here. if i'm a gold exporter, a platinum exporter, i real advertise is focused here a lot of the guys worked out their problems. either way, increase the wages to their workers about 22%. that denies logic in some respects, you would think the strikes would be terrible you not only input costs going up but they are shutdown in terms of production for some time, you are saying all that priced in. >> exporters, if you look at the weak currency, couldn't be better to. they. >> happy thanksgiving to our friends north of the border that is canada. want to miner in canada, toronto based, a pull back recently,

y'all man nah gold. auy. >> another one, tck. >> how is the unrest in south africa impacting kur rehn cities in bring in amelia bordeaux. the rand hitting a 3 1/2-year low against the u.s. dollar. at this point, is there a trade there or do you just simply not fight this trend? >> those who trade are ctas and electronic molds, when the models flip from long rand to short rand as we have the past few days, seen the quick move in rand because it is such a high beta currency, why models trade it, you don't want to fight that flow because the macroflow and the fx market in terms of rand is much smaller than this e flow. you really have to wait until these models decide to turn around, go long rand and jump on the trade after that in terms of the currency market. last point on the rand is just

that nonresident bond holders continue to sell south african bonds. >> the bottom line you don't fight the computers out there in terms of your trade bringing to us, selling euro cad why? >> i didn't think much came out of the finance minister's meeting into europe. they have one more day to go for ecofen. they did approve the esm. the markets waiting for and the market he is haven't gotten is to apply for the bailout. euro will drift lower until we get the news. short the euro against the canadian dollar. blockbuster involvement in canada on friday, jobs rose 52,000 i think positive momentum. >> quick on the levels, e sleve? >> 20-day moving average. >> thanks for your time. amiami ya bordeaux. a trade of the day is the right prescription for money making.

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what is trending now. melissa, did it work for the traders on the desk? >> aig. >> traded well. >> huge. >> traded great since then. yeah. i think it still has legs. no reason to believe that aig can't push towards 40 bucks. ever since that offering a that was completely oversubscribed, aig has been fine.

mike rowe here at a ford tell me fiona, who's having a big tire event? your ford dealer. who has 11 major brands to choose from? your ford dealer. who's offering a rebate? your ford dealer. who has the low price tire guarantee... affording peace of mind to anyone who might be in the market for a new set of tires? your ford dealer. i'm beginning to sense a pattern. buy four select tires, get a $60 rebate. use the ford service credit credit card, get $60 more. that's up to $120. where did you get that sweater vest? your ford dealer. final trade? scott nation? >> let the earnings carnage begin. buy protection. >> tim? >> health care today paid $5 billion to the largest health care provider in brazil. check out the web extra. tell you more about it. >> tease. guy? >> best in class -- nice, best in class, sell gene. >> you loft teechltz. >> lucky enough to hold netflix on this bounce, i d